It is much better to pick stocks when the market is closed than when it is open. It is much better to pick stocks when you have some peace and quiet. Looking back at stocks I have bought over the last ten years and comparing the results, I would have to say that I have done much better making the decision on the weekend than I did during the trading day with too many distractions, news flashes, and my own rambunctiousness. [From the dictionary - marked by uncontrollable exuberance: Unruly]

I have found various factors that make a difference in the long-term success of investments. Adding WHEN to make the decision is not a factor I've encountered. Simply put, if I was to create a value fund based on my other tested factors, I can now say with almost absolute certainty that adding the 'When factor' would improve its results. So my short list of stock fund criteria includes the following:

• Strong sustainable cash flow
• Low Price-to-Book ratio
• Low Price-to-Sales ratio
• Return on Equity (ROE) higher than the P/E ratio (trailing)
  
• Positive return on Invested Capital (ROIC)
• AND NOW - do not make buy decisions when the market is open

I think it is always a good idea to make decisions when one is less stressful, but I never gave it as much thought as I have recently; especially when it comes to stock picking. Those of you who have read my Chasing Value or Serious Money stories have seen all of this before repeatedly. Now with the last factor, which is not visible to investors in any mutual fund, I add one more area of personal discipline. Of course, for the traders among you, making your decisions when the market is closed might be a tad difficult at times.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

New rule for picking stocks: Do it on the weekend originally appeared on BloggingStocks on Fri, 27 Apr 2007 14:56:00 EST. Please see our terms for use of feeds.